On 30 January 2024, the European Banking Authority (EBA) published a speech by its chair José Manuel Campa on digital finance, as well as confidence and resilience as a foundation of well-functioning financial markets.  Before exploring digital finance, Mr Campa shared some observations on the theme of competitiveness. He emphasised that competitiveness equates to the capacity to improve productivity over time in a sustainable manner to increase income levels and improve wellbeing. This set the foundations for the speech, as Mr Campa then explored the intersection between the EU single market and innovation.

Key points in Mr Campa’s speech on digital finance include:

  • Financial institutions have launched a large number of initiatives to address specific risks whilst unlocking the potential of the financial sector through FinTech.
  • Some examples provided were cloud data storage, automated credit scoring, risk modelling and suspicious transactions monitoring.
  • Accordingly, progress has been demonstrated in financial regulation, including the Digital Operational Resilience Act (DORA), the Markets in Crypto-Assets Regulation (MiCAR), the Consumer Credit Directive, the Artificial Intelligence Act and the new Anti-Money Laundering (AML) package. 

Mr Campa then set out what to expect from the EBA around digital finance throughout 2024. He confirmed two of the EBA’s objectives to:

  • Set up and start DORA oversight and MiCAR supervision, to ensure proper oversight of issuers of asset reference and e-money tokens, for example.
  • Increase focus on innovation and consumers, whilst ensuring a smooth transition to the new AML framework, which have broadened their scope to include crypto-asset providers.

Active engagement with other ESAs and Member State competent authorities will also continue to ensure coordination and thorough preparation. 

Mr Campa then went on to outline the EBA’s work in the technological innovation area, including tokenisation, crypto and decentralised finance, artificial intelligence and value chain evolutions. In the area of crypto-assets and decentralised finance, the EBA will be reporting to the European Commission later in 2024 on some activities that fall outside the scope of MiCAR.

Furthermore, the EBA’s objective is to provide an assessment of the areas where additional guidance, clarity or harmonisation may be needed regarding supervisory expectations on the use of artificial intelligence. Finally, Mr Campa highlighted that the EBA’s focus on enabling dialogue between industry and supervisors on RegTech and SupTech developments will be important in the EBA’s performance of supervision under DORA and MiCAR.